Call for a new wave of co-ops

Could this be the new age of the cooperative? The Phone Co-op hopes so, taking a step closer this week towards its goal of becoming a household name when it was named best social enterprise in the UK.

For the organisation's founder and chief executive, Vivian Woodell, winning the accolade at the Enterprising Solutions Awards 2008 has vindicated his belief that co-ops are as relevant today as when the movement was born 150 years ago. "Co-ops are a business model that are made more sustainable by aligning users, owners and other stakeholders, such as the local community and the environment," he says.

Part of the Phone Co-op's business mission is to support the social firm sector. It buys its paper and print services from other co-ops, and in addition to distributing dividends out of profits to its 7,200 members - who each have a vote in board elections in return for buying a stake in the company for as little as £1 - the company invests in new cooperatives.

A wind farm, a Derbyshire hydro project and a community shop have all received loan finance. From this year, it has also offered £250-worth of telecom services free to social enterprise start-ups.

Woodell's idea for a telecom co-op came from his own experiences of paying high telephone bills in eastern Europe, where he was helping to set up cooperatives after the collapse of communism. After investigating how the industry worked, he decided that UK customers could get a better deal by joining together to buy direct from a wholesale carrier.

In 1998, the Phone Co-op was launched from Woodell's spare bedroom, with 24 members and £30,000. A decade later, it has 15,000 customers, among them charities, local authorities and social enterprises. It employs 35 staff from its eco-friendly offices in a converted pig farm in Chipping Norton, Oxfordshire, and has a £7.5m turnover and profits of more than £300,000. But with just 0.06% of the telecom market, Woodell says there is ample room for growth.

"There is no reason that co-ops have to be small," he says. And he believes that the current financial crisis has given a new impetus to the movement. "There are a lot of givens that are no longer givens. The root of how the economy works is trust, and we've seen people push that to the limits. So let's get back to first principles and ask 'What is business for?'"

He hopes that winning the award will help to promote the co-op model. "It's wonderful to have that recognition," he says. But does he think we will see an explosion in the number of co-ops operating in new areas? Woodell predicts that utilities, the rail industry and community transport are the ones to watch. As he says: "Co-ops are a tried and tested model."